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(Alliance News) - Stocks in London are set for a cautious open on Thursday to close out the shortened week as all eyes shift to Frankfurt before the Easter break.
Financial markets in London, mainland Europe and the US will be shut for Good Friday.
In early corporate news in London, National Grid and discoverIE have upped expectations on strong trading, while Dunelm is benefitting from its stores reopening and Smiths Group has found a new finance chief.
IG futures indicate the FTSE 100 index is to open up 9.80 points, or 0.2%, at 7,592.60 on Thursday. The blue chip index inched up 4.14 points, or 0.1%, to 7,580.80 on Wednesday.
But before traders head off for the long weekend, Christine Lagarde and the European Central Bank will take centre stage.
CMC Markets analyst Michael Hewson believes the central bank "doesn't appear to have the luxury of doing nothing".
"Yet this is what we can probably expect when President Lagarde holds her press conference later today, against a backdrop of rising discontent amongst countries like Germany and the Netherlands, about ECB inaction."
He said the ECB "probably has the most difficult task" of all central banks as it tries to navigate the "complex intricacies" of a CPI inflation spread between eurozone members of 4.5% in France, to 15.2% in Estonia.
"This helps explain why, in recent years, the ECB has managed to turn procrastination into an art form, with a degree of linguistic legerdemain that would make a politician proud," Hewson added. "This cannot continue and at some point, the ECB will have to bite the bullet and set out a timeline for a rate hike. Lagarde will also have to fend off questions on how the ECB would deal with a widening of bond spreads, fully aware of the fact that she is currently limited in options on how to achieve that."
The latest interest rate decision from the ECB is at 1245 BST, before Lagarde's press conference at 1330 BST.
"Let's wait and see whether today's ECB statement really will bring any news, and if so what sort of news," Commerzbank analyst Antje Praefcke said.
"According to our experts the expectations should not be too high. It is unlikely to lead to anything more than an intense debate about a possible normalisation of monetary policy."
Praefcke is of the mind the ECB is likely to want to wait and see how the Ukraine conflict and the energy sanctions develop.
"The question is whether the ECB will actually take action in the end. That mainly depends on whether we will see an energy crisis or not. A crisis of that nature would have massive effects on the economy and might therefore cause the Council to delay possible rate hikes," she added.
The pound was quoted at USD1.3141 early Thursday, up from USD1.3060 at the London equities close on Wednesday. The euro was priced at USD1.0920, higher from USD1.0863.
In London, National Grid has upped its earnings guidance as it said higher inflation in the UK has delivered a better than expected performances from its UK Electricity Transmission and Electricity Distribution businesses.
The London-based power infrastructure firm expects its underlying earnings per share to be "modestly higher" than previous guidance - which was raised in November to be seen "significantly" above the top end of a 5% to 7% range.
It also noted underlying operating profit across its New England, New York, and National Grid Ventures units will be in line with previous guidance.
FTSE 250-listed discoverIE Group also raised expectations following a "strong" trading performance in the firm's final two months of its financial year, which ended March 31.
The maker of customised electronics, for sectors such as renewables and transport said orders remain "well ahead" of sales, rising organically by 13% year on year, and are up 27% on the period two years ago. Group sales in the final 2 months are up 20% on the year prior and 22% on the same period two years ago.
As a result, group orders for the annual period are up 36% year on year, as sales rise 25%.
discoverIE ended its financial year with an order book of GBP224 million, a record for the company.
Budget airline Wizz Air said it expects a widened annual loss but saw a better than expected fourth quarter performance.
In the final three months of the company's financial year, ended March 31, it expects to report an operating loss between EUR190 million and EUR210 million - which would beat previous expectations, thanks to a "stronger trading environment".
For the full-year, however, its net loss is guided between EUR632 million and EUR652 million, which would be widened from the EUR576.0 million posted for the 2021 financial year - which was its annual loss since 2012.
To begin financial 2023, Wizz said it is ramping up operations for a "busy" summer programme with the firm expecting to operate available seat kilometres 30% ahead of the April to June 2019 quarter and more than 40% ahead of the July to September 2019 quarter.
"We have been encouraged by demand trends in recent weeks and given the shorter booking horizon expect the bookings for this summer to build significantly after Easter," the airline added.
Dunelm's third quarter sales shot up, it said, thanks to the reopening of its stores, leading the firm to confirm its confidence in meeting market expectations for its annual profit.
In the 13 weeks to March 26, total sales rose 69% year on year to GBP399 million, with year-to-date sales up 25% to GBP1.20 billion.
It noted in the third quarter last year its store estate was closed to customers and only Click & Collect and home delivery services were available.
The homeware retailer said: "Customers responded well to our Winter Sale held in the first few weeks of the quarter, with a very strong sales performance across most categories. We have continued to refresh our product ranges, with our new 'Summer Living' products performing particularly well during March, as customers looked to ready their homes and gardens for summer."
For financial 2022, Dunelm notes the latest range of analyst forecasts puts its pretax profit between GBP195 million to GBP215 million, with consensus at GBP207 million. In financial 2021, it posted a pretax profit of GBP157.8 million.
FTSE 100-listed Smiths Group has appointed former Goldman Sachs executive Clare Scherrer as chief financial officer.
Scherrer spent 25 years at the New York investment bank, and was most recently co-head of the Global Industrials business.
"She has particularly relevant experience in the technology sectors in which Smiths Group has strong positions, including energy, safety & security and aerospace. Clare has been a close advisor to Smiths Group for the past seven years, including advising on the sale of Smiths Medical as well as development of the strategy announced at the November Capital Markets Event," the diversified engineering business said.
Current CFO John Shipsey will step down from the role on April 29.
In the US on Wednesday, Wall Street ended higher, reversing two days of malaise despite another hot inflation print and JPMorgan's slow start to the banking earnings season.
The Dow Jones Industrial Average surged 1.0%, the S&P 500 advanced 1.1% and the tech-heavy Nasdaq Composite jumped 2.0%.
US producer price growth was robust, according to figures on Wednesday. On an annual basis, PPI surged over 11.2% in March, which the Bureau of Labor Statistics noted is the largest increase since 12-month data were first calculated in November 2010. The market expected a 10.5% increase.
JPMorgan shares tumbled 3.2% on Wednesday. It kicked off first-quarter earnings season for US banks with a drop in net income after building up credit reserves. It also saw revenue fall as its investment bank suffered from lower fees.
In the three months to March 31, net income slumped 42% to USD8.28 billion from USD14.30 billion and diluted earnings per share fell to USD2.63 from USD4.50. Total net revenue slipped 5% to USD30.72 billion from USD32.27 billion.
"We remain optimistic on the economy, at least for the short term - consumer and business balance sheets as well as consumer spending remain at healthy levels - but see significant geopolitical and economic challenges ahead due to high inflation, supply chain issues and the war in Ukraine," cautioned Chief Executive Jamie Dimon.
Wall Street's corporate calendar on Thursday has first quarter results from Citi, Goldman Sachs, Morgan Stanley, Wells Fargo and UnitedHealth.
In Asia on Thursday, the Japanese Nikkei 225 index closed up 1.2%. In China, the Shanghai Composite was 1.4% higher, while the Hang Seng index in Hong Kong was up 0.8%. The S&P/ASX 200 in Sydney ended up 0.6%.
Against the yen, the dollar was trading at JPY125.41 early Thursday, down from JPY125.69.
Brent was quoted at USD107.31 a barrel on Thursday morning, up versus USD106.79 at the time of the equity market close in London on Wednesday.
Gold stood at USD1,972.80 an ounce, lower against USD1,977.64 late Wednesday.
As well as the ECB's interest rate decision, Thursday's economic calendar has the latest US initial unemployment claims at 1330 BST.
By Paul McGowan; paulmcgowan@alliancenews.com
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